Another strong quarter for Apple can elevate stock even though it’s within 20% of its all-time high

“Apple (AAPL) has had a great run since an unexpectedly strong third quarter rekindled investor enthusiasm,” Bill Snyder reports for

“The stock has soared by nearly 40% in about three months, while the Nasdaq has appreciated by just 13%,” Snyder reports. “So with the computer maker poised to report fiscal fourth-quarter earnings after Wednesday’s closing bell, investors are wondering if another strong quarter can elevate a stock that’s within 20% of its all-time high.”

“The answer: yes, though immediate gains may not be great, and Apple’s share price can be rather volatile around earnings time,” Snyder reports. “Analysts polled by Thomson First Call are expecting a fourth-quarter profit of 51 cents a share on revenue of $4.66 billion. In the year-ago period, the company earned 38 cents on $3.68 billion in revenue.”

“Apple’s third-quarter results were driven by the resurgence in sales of its Macintosh computers. Those sales jumped 19% year-over-year in the quarter to $1.87 billion, resulting in the strongest revenue growth for the company’s computer business in the last three quarters. Apple ended that quarter with a backlog of orders for its new Macbook consumer notebook,” Snyder reports. “The company believes that many of its professional customers were holding off buying a new system until Apple completed the update of its professional desktops with Intel chips.”

Snyder reports, “As for the iPod, the informal sell-side consensus for iPod sales is about 8.6 million units. However, that level confirms a slowing in the growth of the most-popular digital music player, which has now shipped at a similar level for three straight quarters. In last year’s third quarter, the company shipped about 6.5 million of the devices.”

“The biggest recent blip in the Cupertino, Calif.-based company’s share run-up was caused by concerns that CEO Steve Jobs could be forced to resign because of his role in the company’s possibly flawed procedures for awarding stock options,” Snyder reports. “But most analysts see that as a low-probability event, despite recent CEO departures at technology companies including McAfee and CNet Networks.

Full article here.

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  1. Next year will be another grand time for Apple, considering that many of the people that have been waiting to upgrade until all of the Macs are Intel based, are still awaiting UB from Adobe.
    There will probably be another surge in sales after CS3 is finally released.

  2. “investors are wondering if another strong quarter can elevate a stock that’s within 20% of its all-time high.”

    OK, someone help me out here. If I recall correctly, the all time high was earlier this year at about $86. If you look at 80% of $86, you get somewhere around $61. Maybe they mean the other way around so, $86/1.2 = $71.

    Either way, we’re already within 20% of it’s all time high. At this time, we’re within 13% or the all time high.

    Now, if they suggested within 5% of all time high, then I’d agree.

    I’d say we break the highs by the end of 2006. With all sorts of interesting things to happen in January after MacWorld.

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